Foot Locker lowers outlook, to close 250 stores

NEW YORK Foot Locker Inc. announced today that it expects to report a loss of 17 cents to 20 cents per share for the second quarter 2007, as a result of an aggressive strategy to eliminate slow-selling merchandise from its stores. This range reflects increased markdowns in the company's U.S. stores of approximately $55 million at cost, or approximately 22 cents per share, versus the same period last year. The company's estimate for the second quarter that was provided at the beginning of the period was net income of 15 cents to 20 cents per share. The company also updated its financial forecast for the second quarter to reflect that its comparable-store sales are expected to decrease 7% to 8%.

"During the second quarter, we made the strategic decision to liquidate slower-selling merchandise in our U.S. stores more aggressively than we had planned at the beginning of the quarter, with an objective of improving our inventory position before the start of the fall season," stated Matthew Serra, Foot Locker Inc.'s chairman and ceo. "The financial impact of implementing this important strategy was the primary reason for the projected net loss for the second quarter of 2007."

Foot Locker also announced that it will close up to 250 stores in 2007. This is approximately twice the number of stores that the company had originally planned to close in 2007 and, as a result of this action, Foot Locker expects that the profitability of the company's U.S. store base will be enhanced, beginning in 2008.

The company added that it is in the process of developing plans to open additional Foot Locker stores more aggressively in the European and surrounding markets. During 2008, the company currently expects to open up to 30 new stores in this region that will be managed by the Foot Locker Europe management team.